Plaza Saltillo developer to council: We’ve maxed out affordable units

Ben Wear @bwear

Sunday

Feb 19, 2017 at 12:01 AMNov 3, 2018 at 12:20 PM

The Austin City Council once again put off final action Thursday evening on the Plaza Saltillo development, instead approving a proposed zoning change only on second reading to allow further negotiations between the developers and neighborhood critics of the East Austin project.

The vote on the zoning change, which would allow Endeavor Real Estate Group and Columbus Realty Partners to build taller apartment, retail and office structures on the 11 acres just east of Interstate 35 along East Fifth Street, was 8-3. Council Members Alison Alter, Leslie Pool and Kathie Tovo voted against the measure, which will require a third reading vote before the developers could move forward with construction.

Endeavor representatives took a hard line Thursday, saying that with possible requirements from the council for more affordable housing, “the project would not be built,” said Jason Thumlert, an executive with the development.

“We have no more room to give on affordable housing,” Thumlert told the council.

The council does not meet again until March 2.

Endeavor, which will build the retail and office sections, and Columbus, the residential developers, were chosen by Capital Metro in June 2014 to develop the old railyard, which the transit agency has owned since the 1990s. The MetroRail commuter line runs along the tract and has a station, Plaza Saltillo, at the east end.

Representatives of the developer said that when the zoning is finally approved, construction on most of the project, from I-35 to Navasota Street, could begin within two months. That work would take about two years, the Endeavor officials said.

Work on an affordable housing center, to be built between Navasota and Onion Street by a third developer under a separate agreement with Endeavor, would start later, they said.

Endeavor representatives said publicly in 2014 that 25 percent of the 800 planned apartments would have rents considered “affordable” under city policy and reserved for people making 50 percent or less of median family income in Austin.

The developer, and Capital Metro officials, now say that privately the Endeavor/Columbus bid from the start guaranteed just 15 percent of the units would be affordable. An additional 10 percent were to have market rents unless the city of Austin stepped in to subsidize the difference. The city has not offered to do so.

Endeavor officials now say the overall development would have 141 of the 800 units, or 17.6 percent, for tenants who qualify for affordable rents. But 100 of those would be in the affordable housing center to be built by Austin-based Diana McIver & Associates, potentially with different designs and amenities. That means that 41 of Endeavor’s 700 apartments would be affordable, or just under than 6 percent.

Some neighbors have said they support the plan by Endeavor, a developer that is separately involved with the American-Statesman’s owners to redevelop the site where the newspaper operates.

The neighborhood opponents of the Plaza Saltillo project have urged the City Council to reject the developers’ desire for approval to build an eight-story, 125-foot office building, twice the height allowed under the current zoning, near Waller Street. The request for added height — the council has given preliminary approval for just a 70-foot office building — has provided leverage on the affordable housing issue, and is the crux of the ongoing talks.

The council on Feb. 9 approved the zoning change on first reading only.

Capital Metro, under terms hammered out with the developers over the past 30 months, would get more than $200 million in lease payments over the 99-year life of the agreement, officials have said. That would begin with a $1.6 million payment in year one.

The transit agency has not released the proposed agreement, saying it is not subject to disclosure under Texas open records law because it is still technically in draft form.

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